The Flip Side of Freedom: when unlimited vacation time backfires

Indulgent employee benefits such as unlimited time off policies may sound like they were dreamed up by a bored worker on a slow Tuesday.

However, offering unrestricted holiday is becoming more widespread among companies, especially in the US. Virgin, Twitter and LinkedIn employees all have the luxury of unlimited paid vacation time, and several young companies and start-ups are following suit.

Clearly, it places a huge amount of trust in the individual employee – allowing them to take time off at their discretion and having confidence in them to make the judgement that it won’t damage their projects, their career or the interests of the business.

At face value, this sounds like a leap towards utopia – who would say no to unlimited holiday? But these policies have a clever effect. Giving employees the freedom to take vacation time as and when they please actually constrains their leisure time. Your first thought might be: why? Surely offering employees unlimited paid time away from their jobs is going to result in a few ‘bad eggs’ milking the policy for all it’s worth?

It isn’t a surprise to see that the companies who are offering these policies are competitive businesses with high-octane workforces. Their people are driven to succeed and regularly put in the hours, so it’s unlikely that the best employees are going to take full advantage of the policy.

And then a precedent is set by the most hard-working, driven team members: the role models who lead the way. Everyone else follows suit, ironically resulting in people taking less annual leave than if they were simply limited to a set number of weeks per year. Management Today discusses how unlimited PTO can backfire, in the case on online messaging company Evernote:

…instead of staff taking more time off work the opposite happened and people stopped taking holiday altogether […] the problem became so acute that Evernote was forced to incentivise staff to actually leave the office by offering $1,000 (£657) for anyone taking at least five days holiday.

Feelings of guilt creep in, with people worrying about using the policy and the amount of time that they spend away from work. How much is too much? What’s the right balance?

When we’re faced with unlimited resources, we often struggle to make a wise choice and we end up by going for the inferior option. Whereas a fixed annual leave policy offers a clear directive to employees, unlimited choice means that employees have to decide for themselves how much is acceptable. And that’s a difficult decision which, as humans, our brains tend to shy away from.

So, offering such an ostensibly tempting benefit may well result in employees underutilising it, eventually leading to increased stress and burnout. There is such a thing as “too good to be true” – it’s wise to be wary of the flip side of freedom.

What do you think of unlimited vacation policies? Share your thoughts in the comments section.

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Posted on 28th January 2016 in Culture
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